Article 43

 

Bad Moon Rising

Saturday, April 06, 2019

Bad Moon Rising Part 75 - Race To The Bottom 2

image: moved overseas

15 Years ago I WROTE ABOUT the fall of the Unites States, and rise of China, as we close down or move overseas more and more businesses, and ship more and more jobs to other countries, resulting in widespread unemployment and poverty of the disappearing of middle class America. We call it a RACE TO THE BOTTOM.

My opinions and fears haven’t changed over the years.

What does SURPRISE me though, is that our society hasn’t totally collapsed yet.

The folks at Anonymous sum it up below.

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Anonymous Message To Citizens of the United States of America II

By David Cohen
Anonymous
April 6, 2019

Greetings citizens of the United States of America.

This is a message to wake you up to the coming changes in the world economy.

The United States has enjoyed the position of top global super power for many generations, but soon that time is coming to an end. CHINA is quickly rising to dominance on the global stage, and they are projected to overtake the United States economically and culturally in the years to come.

The Chinese military has also been overlooked and underestimated by westerners as it continues to grow.

Last month, it was announced that the government of China set a defense budget growth target of 7.5 percent in 2019, which is slower than last year but still enough to build a military that rivals the United States.

According to research from the Stockholm International Peace Research Institute, China spends considerably more on defense than they reveal to the public. There is no doubt that the United States still spends more on the military than any other country, but with China’s massive population, they can get more bang for their buck.

CHINA is beginning to take over the United States in many other ways also, especially in terms of economics. Just last month it was announced that Apple, one of the largest corporations in the world, has more suppliers and manufacturers in China and Hong Kong than anywhere else in the world.

The total number of production sites located in mainland China increased by 26 from the previous year to 380, accounting for almost 50% of all sites engaged in Apple’s supply chain. The 200 suppliers together represent 98% of Apples fiscal year procurement of materials, manufacturing, and assembly, according to the Asia Review.

China has massive leverage over the rest of the world by producing so many of our products. The outsourcing of jobs also weakens the economies of other nations and funnels large sums of money into the Chinese economy. This relationship, in part, has contributed to the massive debt crisis experienced in the United States economy. In fact, China is the largest foreign holder of US debt in the world.

The U.S. debt to China is $1.13 trillion as of January 2019. The rest of the $22 trillion national debt is owned by either the American people or by the U.S. government itself, but out of all the nations on earth outside of the US, China is the largest holder. Japan comes second at $1.07 trillion, followed by Brazil at $305 billion. Ireland holds $270 billion, and the United Kingdom owns $272 billion. China is now becoming a major player on the global stage that is quickly beginning to rival the United States.

Now the United States government is embroiled in a trade war with the government of China, but time will show that China has far more leverage in this situation. China is also on the cutting edge culturally, with a population that is far more educated than that of the US, and an increasing percentage of global patents and inventions. This is because the government of the United States has dumbed their citizens down to make them easier to control, while China is created a well-oiled machine and economic powerhouse.

The population of the United States has become soft because they have mostly lived in comfort, and they have allowed their government to become corrupt, unaware of what has been happening in the outside world. If the citizens of the United States are going to do anything to protect themselves from the coming changes in global politics, they must educate themselves and learn to become more self-sufficient and independent. The United States is quickly SLIDING into the ranking of a third world country, and without drastic action, the lives of comfort that citizens of the country have known will be COMING TO AN END. The rising influence of China can not be stopped, however, it is not too late to save your own country from the corrupt politicians that have run it into the ground.

The time has come for us to unite, the time has come for us to stand up and fight!

We are Anonymous!

We are Legion!

We do not forgive!

We do not forget!

Expect us!

SOURCE

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“The American Dream Is Lost” - Ray Dalio Tells ‘60 Minutes’ Why American Capitalism Must Be Reformed

By Tyler Durden
Zerohedge
April 8, 2019

After giving $100 MILLION for Connecticut’s public schools and publishing a lengthy treatise entitled “Why And How Capitalism Needs To Be Reformed”, Bridgewater Associates founder Ray Dalio took his battle to encourage bipartisan though still-radical ‘reform’ of American capitalism to an even broader audience: that of CBS’s long-running television news magazine ‘60 Minutes’, where he invited the program’s journalists to interview him aboard his yacht near the Bahamas, and to the rarefied offices of Bridgewater, to hear about how the American system must either change, or die.

The interview included plenty of red meat for Dalio’s journalist guests, as the billionaire illustrated his point with bombastic quotes like the one below:

“I think the AMERICAN DREAM is LOST...for the most part we don’t even talk about it.”

But what’s not working?

“It’s not redistributing opportunity...there’s a growing wealth gap and a growing income gap.”

Dalio - who ‘60 Minutes’ claimed avoids extensive interviews despite his borderline pathological lust for publicity - reiterated many of the ‘solutions’ he proposed in his essay, included the notion that a ‘national emergency’ should be declared to deal with economic inequality.

“If I was president of the United States what I would do is recognize that this is a national emergency.”

Either that, or we risk allowing America’s longstanding Democratic institutions being thrown into upheaval, because the economic inequality will be resolved eventually. The question is whether the solution will involve practical reforms or a descent into authoritarianism.

“If you look at history, if you have two groups of people with very different economic conditions, and you have an economic down turn...YOU GET CONFLICT. If you look at the 1930s, you had 4 countries that were democracies that chose not to be democracies to bring order to the conflict.”

Channeling Warren Buffet, who pays very little in taxes due to the fact that most of his wealth is in stock, Dalio says ‘of course’ taxes should be raised on wealthy people like him. But the key is to take money raised by the government and use it “productively.” According to Dalio, the notion that tax cuts stimulate growth “doesn’t make any sense at all.”

But in response to all of the young people who believe socialism is the answer to America’s problems, Dalio would like them to know one thing: It definitely isn’t.

“Capitalism needs to be reformed...it doesn’t need to be abandoned. it needs to be reformed in order to work better. American capitalism isn’t sustainable.”

But what are the odds that the reforms of which Dalio speaks actually happen. If e had to assign probabilities, he said ‘60-40’ that the inequality issue will be dealt with ‘badly’ - implying either a violent revolution like he warned about in his essay, or the election of an authoritarian leader to “restore order”, as he put it.

Dalio, as CBS reminds us, bought his first stock when he was 12 with money he made as a golf caddie. However, the program’s description of Bridgewater’s army of analysts was slightly antiquated, depicting them as the drivers of the firm’s investment decisions (rather than a marketing tool. At Bridgewater, it’s well known that the machines make most of the investment decisions.) More humorously, ‘60 Minutes’ sat in on one of Bridgewater’s staff meetings, and gently reported that “there’s a bit of a Big Brother vibe”...and humorously pointed out that a camera visible in one of the company’s meetings “wasn’t ours, it’s theirs").

Though one fact that’s not up for debate: Bridgewater has made money for its clients during 25 of the last 28 years. And last year, when the S&P 500 sank 4.5%, Bridgewater posted a double-digit gain.

The interview closes with an apt metaphor for differentiating Dalio’s approach with tech billionaires like Jeff Bezos: Traveling near the ocean floor in a machine built for marine biologists to explore the Ocean floor, Dalio says he finds deep-sea exploration to be far more important than exploring space. “If I come down here and see the coral reefs are dying...it doesn’t take a genius to know that the something is out of balance.”

SOURCE

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Thursday, October 04, 2018

Bad Moon Rising Part 74 - Infrastructure Cyber-Threat III

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The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies

The attack by Chinese spies reached almost 30 U.S. companies, including Amazon and Apple, by compromising Americas technology supply chain, according to extensive interviews with government and corporate sources.

By Jordan Robertson and Michael Riley
Bloomberg
October 4,2018

In 2015, Amazon.com Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Based in Portland, Ore., Elemental made software for compressing massive video files and formatting them for different devices. Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency. Elemental’s national security contracts weren’t the main reason for the proposed acquisition, but they fit nicely with Amazon’s government businesses, such as the highly secure cloud that Amazon Web Services (AWS) was building for the CIA.

To help with due diligence, AWS, which was overseeing the prospective acquisition, hired a third-party company to scrutinize Elemental’s security, according to one person familiar with the process. The first pass uncovered troubling issues, prompting AWS to take a closer look at Elemental’s main product: the expensive servers that customers installed in their networks to handle the video compression. These servers were assembled for Elemental by Super Micro Computer Inc., a San Jose-based company (commonly known as Supermicro) that’s also one of the world’s biggest suppliers of server motherboards, the fiberglass-mounted clusters of chips and capacitors that act as the neurons of data centers large and small. In late spring of 2015, Elementa’s staff boxed up several servers and sent them to Ontario, Canada, for the third-party security company to test, the person says.

Nested on the servers motherboards, the testers found a tiny microchip, not much bigger than a grain of rice, that WASN"T PART OF the boards original design. Amazon reported the discovery to U.S. authorities, sending a shudder through the intelligence community. Elemental’s servers could be found in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships. And Elemental was just one of hundreds of Supermicro customers.

During the ensuing top-secret probe, which remains open more than three years later, investigators determined that the chips allowed the attackers to create a stealth doorway into any network that included the altered machines. Multiple people familiar with the matter say investigators found that the chips had been inserted at factories run by manufacturing subcontractors in China.

This attack was SOMETHING GRAVER than the software-based incidents the world has GROWN ACCUSTOMED to seeing. HARDWARE hacks are more difficult to pull off and potentially more devastating, promising the kind of long-term, stealth access that spy agencies are willing to invest millions of dollars and many years to get.

“Having a well-done, nation-state-level hardware implant surface would be like witnessing a unicorn jumping over a rainbow”

There are two ways for spies to alter the guts of computer equipment. One, known as interdiction, consists of manipulating devices as they’re in transit from manufacturer to customer. This approach is favored by U.S. spy agencies, according to documents leaked by former National Security Agency contractor Edward Snowden. The other method involves seeding changes from the very beginning.

One country in particular has an advantage executing this kind of attack: China, which by some estimates makes 75 percent of the worlds mobile phones and 90 percent of its PCs. Still, to actually accomplish a seeding attack would mean developing a deep understanding of a productҒs design, manipulating components at the factory, and ensuring that the doctored devices made it through the global logistics chain to the desired location - a feat akin to throwing a stick in the Yangtze River upstream from Shanghai and ensuring that it washes ashore in Seattle. җHaving a well-done, nation-state-level hardware implant surface would be like witnessing a unicorn jumping over a rainbow, says Joe Grand, a hardware hacker and the founder of Grand Idea Studio Inc. “Hardware is just so far off the radar, its almost treated like black magic.”

But that’s just what U.S. investigators found: The chips had been inserted during the manufacturing process, two officials say, by operatives from a unit of the People’s Liberation Army. In Supermicro, Chinas spies appear to have found a perfect conduit for what U.S. officials now describe as the most significant supply chain attack known to have been carried out against American companies.

One official says investigators found that it eventually affected almost 30 companies, including a major bank, government contractors, and the worldӒs most valuable company, Apple Inc. Apple was an important Supermicro customer and had planned to order more than 30,000 of its servers in two years for a new global network of data centers. Three senior insiders at Apple say that in the summer of 2015, it, too, found malicious chips on Supermicro motherboards. Apple severed ties with Supermicro the following year, for what it described as unrelated reasons.

In emailed statements, Amazon (which announced its acquisition of Elemental in September 2015), Apple, and Supermicro disputed summaries of Bloomberg Businessweeks reporting."It’s untrue that AWS knew about a supply chain compromise, an issue with malicious chips, or hardware modifications when acquiring Elemental,” Amazon wrote. On this we can be very clear: “Apple has never found malicious chips, hardware manipulations or vulnerabilities purposely planted in any server,” Apple wrote. “We remain unaware of any such investigation,” wrote a spokesman for Supermicro, Perry Hayes. The Chinese government didn’t directly address questions about manipulation of Supermicro servers, issuing a statement that read, in part, “Supply chain safety in cyberspace is an issue of common concern, and China is also a victim.” The FBI and the Office of the Director of National Intelligence, representing the CIA and NSA, declined to comment.

The companies’ denials are countered by six current and former senior national security officials, who = in conversations that began during the Obama administration and continued under the Trump administration - detailed the discovery of the chips and the governments investigation. One of those officials and two people inside AWS provided extensive information on how the attack played out at Elemental and Amazon; the official and one of the insiders also described Amazon’s cooperation with the government investigation. In addition to the three Apple insiders, four of the six U.S. officials confirmed that Apple was a victim. In all, 17 people confirmed the manipulation of Supermicros hardware and other elements of the attacks. The sources were granted anonymity because of the sensitive, and in some cases classified, nature of the information.

One government official says China’s goal was long-term access to high-value corporate secrets and sensitive government networks. No consumer data is known to have been stolen.

The ramifications of the attack continue to play out. The Trump administration has made computer and networking hardware, including motherboards, a focus of its latest round of trade sanctions against China, and White House officials have made it clear they think companies will begin shifting their supply chains to other countries as a result. Such a shift might assuage officials who have been warning for years about the security of the supply chain - even though they’ve never disclosed a major reason for their concerns.

Back in 2006, three engineers in Oregon had a clever idea. Demand for mobile video was about to explode, and they predicted that broadcasters would be desperate to transform programs designed to fit TV screens into the various formats needed for viewing on smartphones, laptops, and other devices. To meet the anticipated demand, the engineers started Elemental Technologies, assembling what one former adviser to the company calls a genius team to writecode that would adapt the superfast graphics chips being produced for high-end video-gaming machines. The resulting software dramatically reduced the time it took to process large video files. Elemental then loaded the software onto custom-built servers emblazoned with its leprechaun-green logos.

Elemental servers sold for as much as $100,000 each, at profit margins of as high as 70 percent, according to a former adviser to the company. Two of Elementals biggest early clients were the Mormon church, which used the technology to beam sermons to congregations around the world, and the adult film industry, which did not.

Elemental also started working with American spy agencies. In 2009 the company announced a development partnership with In-Q-Tel Inc., the CIA’s investment arm, a deal that paved the way for Elemental servers to be used in national security missions across the U.S. government. Public documents, including the company’s own promotional materials, show that the servers have been used inside Department of Defense data centers to process drone and surveillance-camera footage, on Navy warships to transmit feeds of airborne missions, and inside government buildings to enable secure videoconferencing. NASA, both houses of Congress, and the Department of Homeland Security have also been customers. This portfolio made Elemental a target for foreign adversaries.

Supermicro had been an obvious choice to build Elemental’s servers. Headquartered north of San Joses airport, up a smoggy stretch of Interstate 880, the company was founded by Charles Liang, a Taiwanese engineer who attended graduate school in Texas and then moved west to start Supermicro with his wife in 1993. Silicon Valley was then embracing outsourcing, forging a pathway from Taiwanese, and later Chinese, factories to American consumers, and Liang added a comforting advantage: Supermicro’s motherboards would be engineered mostly in San Jose, close to the company’s biggest clients, even if the products were manufactured overseas.

Today, Supermicro sells more server motherboards than almost anyone else. It also dominates the $1 billion market for boards used in special-purpose computers, from MRI machines to weapons systems. Its motherboards can be found in made-to-order server setups at banks, hedge funds, cloud computing providers, and web-hosting services, among other places. Supermicro has assembly facilities in California, the Netherlands, and Taiwan, but its motherboardsҒits core productare nearly all manufactured by contractors in China.

The company’s pitch to customers hinges on unmatched customization, made possible by hundreds of full-time engineers and a catalog encompassing more than 600 designs. The majority of its workforce in San Jose is Taiwanese or Chinese, and Mandarin is the preferred language, with hanzi filling the whiteboards, according to six former employees. Chinese pastries are delivered every week, and many routine calls are done twice, once for English-only workers and again in Mandarin. The latter are more productive, according to people whove been on both. These overseas ties, especially the widespread use of Mandarin, would have made it easier for China to gain an understanding of Supermicro’s operations and potentially to infiltrate the company. (A U.S. official says the governments probe is still examining whether spies were planted inside Supermicro or other American companies to aid the attack.)

With more than 900 customers in 100 countries by 2015, Supermicro offered inroads to a bountiful collection of sensitive targets. “Think of Supermicro as the Microsoft of the hardware world,” says a former U.S. intelligence official whoss studied Supermicro and its business model. Attacking Supermicro motherboards is like attacking Windows. It’s like attacking the whole world.

The security of the global technology supply chain had been compromised, even if consumers and most companies didn’t know it yet

Well before evidence of the attack surfaced inside the networks of U.S. companies, American intelligence sources were reporting that Chinas spies had plans to introduce malicious microchips into the supply chain. The sources weren’t specific, according to a person familiar with the information they provided, and millions of motherboards are shipped into the U.S. annually. But in the first half of 2014, a different person briefed on high-level discussions says, intelligence officials went to the White House with something more concrete: China’s >a href="http://article43.com/index.php?/weblog/bad_moon_rising_71/" rel="nofollow">MILITARY</a> was preparing to insert the chips into Supermicro motherboards bound for U.S. companies.

The specificity of the information was remarkable, but so were the challenges it posed. Issuing a broad warning to Supermicro’s customers could have crippled the company, a major American hardware maker, and it wasn’t clear from the intelligence whom the operation was targeting or what its ultimate aims were. Plus, without confirmation that anyone had been attacked, the FBI was limited in how it could respond. The White House requested periodic updates as information came in, the person familiar with the discussions says.

Apple made its discovery of suspicious chips inside Supermicro servers around May 2015, after detecting odd network activity and firmware problems, according to a person familiar with the timeline. Two of the senior Apple insiders say the company reported the incident to the FBI but kept details about what it had detected tightly held, even internally. Government investigators were still chasing clues on their own when Amazon made its discovery and gave them access to sabotaged hardware, according to one U.S. official. This created an invaluable opportunity for intelligence agencies and the FBI - by then running a full investigation led by its cyber- and counterintelligence teams - to see what the chips looked like and how they worked.

The chips on Elemental servers were designed to be as inconspicuous as possible, according to one person who saw a detailed report prepared for Amazon by its third-party security contractor, as well as a second person who saw digital photos and X-ray images of the chips incorporated into a later report prepared by Amazon’s security team. Gray or off-white in color, they looked more like signal conditioning couplers, another common motherboard component, than microchips, and so they were unlikely to be detectable without specialized equipment. Depending on the board model, the chips varied slightly in size, suggesting that the attackers had supplied different factories with different batches.

Officials familiar with the investigation say the primary role of implants such as these is to open doors that other attackers can go through. “Hardware attacks are about access,” as one former senior official puts it. In simplified terms, the implants on Supermicro hardware manipulated the core operating instructions that tell the server what to do as data move across a motherboard, two people familiar with the chips operation say. This happened at a crucial moment, as small bits of the operating system were being stored in the board’s temporary memory en route to the servers central processor, the CPU. The implant was placed on the board in a way that allowed it to effectively edit this information queue, injecting its own code or altering the order of the instructions the CPU was meant to follow. Deviously small changes could create disastrous effects.

Since the implants were small, the amount of code they contained was small as well. But they were capable of doing two very important things: telling the device to communicate with one of several anonymous computers elsewhere on the internet that were loaded with more complex code; and preparing the deviceҒs operating system to accept this new code. The illicit chips could do all this because they were connected to the baseboard management controller, a kind of superchip that administrators use to remotely log in to problematic servers, giving them access to the most sensitive code even on machines that have crashed or are turned off.

This system could let the attackers alter how the device functioned, line by line, however they wanted, leaving no one the wiser. To understand the power that would give them, take this hypothetical example: Somewhere in the Linux operating system, which runs in many servers, is code that authorizes a user by verifying a typed password against a stored encrypted one. An implanted chip can alter part of that code so the server wont check for a passwordҒand presto! A secure machine is open to any and all users. A chip can also steal encryption keys for secure communications, block security updates that would neutralize the attack, and open up new pathways to the internet. Should some anomaly be noticed, it would likely be cast as an unexplained oddity. The hardware opens whatever door it wants, says Joe FitzPatrick, founder of Hardware Security Resources LLC, a company that trains cybersecurity professionals in hardware hacking techniques.

U.S. officials had caught China experimenting with hardware tampering before, but they’d never seen anything of this scale and ambition. The security of the global technology supply chain had been compromised, even if consumers and most companies didn’t know it yet. What remained for investigators to learn was how the attackers had so thoroughly infiltrated Supermicros production processesand how many doors they’d opened into American targets.

Unlike software-based hacks, hardware manipulation creates a real-world trail. Components leave a wake of shipping manifests and invoices. Boards have serial numbers that trace to specific factories. To track the corrupted chips to their source, U.S. intelligence agencies began following Supermicro’s serpentine supply chain in reverse, a person briefed on evidence gathered during the probe says.

As recently as 2016, according to DigiTimes, a news site specializing in supply chain research, Supermicro had three primary manufacturers constructing its motherboards, two headquartered in Taiwan and one in Shanghai. When such suppliers are choked with big orders, they sometimes parcel out work to subcontractors. In order to get further down the trail, U.S. spy agencies drew on the prodigious tools at their disposal. They sifted through communications intercepts, tapped informants in Taiwan and China, even tracked key individuals through their phones, according to the person briefed on evidence gathered during the probe. Eventually, that person says, they traced the malicious chips to four subcontracting factories that had been building Supermicro motherboards for at least two years.

As the agents monitored interactions among Chinese officials, motherboard manufacturers, and middlemen, they glimpsed how the seeding process worked. In some cases, plant managers were approached by people who claimed to represent Supermicro or who held positions suggesting a connection to the government. The middlemen would request changes to the motherboards original designs, initially offering bribes in conjunction with their unusual requests. If that didnҒt work, they threatened factory managers with inspections that could shut down their plants. Once arrangements were in place, the middlemen would organize delivery of the chips to the factories.

The investigators concluded that this intricate scheme was the work of a Peoples Liberation Army unit specializing in hardware attacks, according to two people briefed on its activities. The existence of this group has never been revealed before, but one official says, ҒWeve been tracking these guys for longer than weҒd like to admit. The unit is believed to focus on high-priority targets, including advanced commercial technology and the computers of rival militaries. In past attacks, it targeted the designs for high-performance computer chips and computing systems of large U.S. internet providers

Provided details of Businessweek’s reporting, China’s Ministry of Foreign Affairs sent a statement that said “China is a resolute defender of cybersecurity.” The ministry added that in 2011, China proposed international guarantees on hardware security along with other members of the Shanghai Cooperation Organization, a regional security body. The statement concluded, ӒWe hope parties make less gratuitous accusations and suspicions but conduct more constructive talk and collaboration so that we can work together in building a peaceful, safe, open, cooperative and orderly cyberspace.

The Supermicro attack was on another order entirely from earlier episodes attributed to the PLA. It threatened to have reached a dizzying array of end users, with some vital ones in the mix. Apple, for its part, has used Supermicro hardware in its data centers sporadically for years, but the relationship intensified after 2013, when Apple acquired a startup called Topsy Labs, which created superfast technology for indexing and searching vast troves of internet content. By 2014, the startup was put to work building small data centers in or near major global cities. This project, known internally as Ledbelly, was designed to make the search function for Appleғs voice assistant, Siri, faster, according to the three senior Apple insiders.

Documents seen by Businessweek show that in 2014, Apple planned to order more than 6,000 Supermicro servers for installation in 17 locations, including Amsterdam, Chicago, Hong Kong, Los Angeles, New York, San Jose, Singapore, and Tokyo, plus 4,000 servers for its existing North Carolina and Oregon data centers. Those orders were supposed to double, to 20,000, by 2015. Ledbelly made Apple an important Supermicro customer at the exact same time the PLA was found to be manipulating the vendors hardware.

Project delays and early performance problems meant that around 7,000 Supermicro servers were humming in Appleԓs network by the time the companys security team found the added chips. Because Apple didnԒt, according to a U.S. official, provide government investigators with access to its facilities or the tampered hardware, the extent of the attack there remained outside their view.

American investigators eventually figured out who else had been hit. Since the implanted chips were designed to ping anonymous computers on the internet for further instructions, operatives could hack those computers to identify others whod been affected. Although the investigators couldn’t be sure they’d found every victim, a person familiar with the U.S. probe says they ultimately concluded that the number was almost 30 companies.

That left the question of whom to notify and how. U.S. officials had been warning for years that hardware made by two Chinese telecommunications giants, Huawei Corp. and ZTE Corp., was subject to Chinese government manipulation. (Both Huawei and ZTE have said no such tampering has occurred.) But a similar public alertregarding a U.S. company was out of the question. Instead, officials reached out to a small number of important Supermicro customers. One executive of a large web-hosting company says the message he took away from the exchange was clear: Supermicro’s hardware couldn’t be trusted."ҒThats been the nudge to everyone - get that crap out,” the person says.

Amazon, for its part, began acquisition talks with an Elemental competitor, but according to one person familiar with Amazon’s deliberations, it reversed course in the summer of 2015 after learning that Elemental’s board was nearing a deal with another buyer. Amazon announced its acquisition of Elemental in September 2015, in a transaction whose value one person familiar with the deal places at $350 million. Multiple sources say that Amazon intended to move Elemental’s software to AWSs cloud, whose chips, motherboards, and servers are typically designed in-house and built by factories that Amazon contracts from directly.

A notable exception was AWS’s data centers inside China, which were filled with Supermicro-built servers, according to two people with knowledge of AWSs operations there. Mindful of the Elemental findings, Amazon’s security team conducted its own investigation into AWSs Beijing facilities and found altered motherboards there as well, including more sophisticated designs than theyҒd previously encountered. In one case, the malicious chips were thin enough that theyd been embedded between the layers of fiberglass onto which the other components were attached, according to one person who saw pictures of the chips. That generation of chips was smaller than a sharpened pencil tip, the person says. (Amazon denies that AWS knew of servers found in China containing malicious chips.)

China has long been known to monitor banks, manufacturers, and ordinary citizens on its own soil, and the main customers of AWSҒs China cloud were domestic companies or foreign entities with operations there. Still, the fact that the country appeared to be conducting those operations inside Amazons cloud presented the company with a Gordian knot. Its security team determined that it would be difficult to quietly remove the equipment and that, even if they could devise a way, doing so would alertthe attackers that the chips had been found, according to a person familiar with the companyҒs probe. Instead, the team developed a method of monitoring the chips. In the ensuing months, they detected brief check-in communications between the attackers and the sabotaged servers but didnt see any attempts to remove data. That likely meant either that the attackers were saving the chips for a later operation or that theyҒd infiltrated other parts of the network before the monitoring began. Neither possibility was reassuring.

When in 2016 the Chinese government was about to pass a new cybersecurity law - seen by many outside the country as a pretext to give authorities wider access to sensitive data - Amazon decided to act, the person familiar with the company’s probe says. In August it transferred operational control of its Beijing data center to its local partner, Beijing Sinnet, a move the companies said was needed to comply with the incoming law. The following November, Amazon sold the entire infrastructure to Beijing Sinnet for about $300 million. The person familiar with Amazon’s probe casts the sale as a choice to hack off the diseased limb.

As for Apple, one of the three senior insiders says that in the summer of 2015, a few weeks after it identified the malicious chips, the company started removing all Supermicro servers from its data centers, a process Apple referred to internally as “going to zero.” Every Supermicro server, all 7,000 or so, was replaced in a matter of weeks, the senior insider says. (Apple denies that any servers were removed.) In 2016, Apple informed Supermicro that it was severing their relationship entirelya decision a spokesman for Apple ascribed in response to Businessweek’s questions to an unrelated and relatively minor security incident.

That August, Supermicros CEO, Liang, revealed that the company had lost two major customers. Although he didnҒt name them, one was later identified in news reports as Apple. He blamed competition, but his explanation was vague. When customers asked for lower price, our people did not respond quickly enough,Ғ he said on a conference call with analysts. Hayes, the Supermicro spokesman, says the company has never been notified of the existence of malicious chips on its motherboards by either customers or U.S. law enforcement.

Concurrent with the illicit chips discovery in 2015 and the unfolding investigation, Supermicro has been plagued by an accounting problem, which the company characterizes as an issue related to the timing of certain revenue recognition. After missing two deadlines to file quarterly and annual reports required by regulators, Supermicro was delisted from the Nasdaq on Aug. 23 of this year. It marked an extraordinary stumble for a company whose annual revenue had risen sharply in the previous four years, from a reported $1.5 billion in 2014 to a projected $3.2 billion this year.

One Friday in late September 2015, President Barack Obama and Chinese President Xi Jinping appeared together at the White House for an hourlong press conference headlined by a landmark deal on cybersecurity. After months of negotiations, the U.S. had extracted from China a grand promise: It would no longer support the theft by hackers of U.S. intellectual property to benefit Chinese companies. Left out of those pronouncements, according to a person familiar with discussions among senior officials across the U.S. government, was the White House’s deep concern that China was willing to offer this concession because it was already developing far more advanced and surreptitious forms of hacking founded on its near monopoly of the technology supply chain.

In the weeks after the agreement was announced, the U.S. government quietly raised the alarm with several dozen tech executives and investors at a small, invite-only meeting in McLean, Va., organized by the Pentagon. According to someone who was present, Defense Department officials briefed the technologists on a recent attack and asked them to think about creating commercial products that could detect hardware implants. Attendees werent told the name of the hardware maker involved, but it was clear to at least some in the room that it was Supermicro, the person says.

THE PROBLEM under discussion was’t just technological. It spoke to decisions made decades ago to send advanced production work to Southeast Asia. In the intervening years, low-cost Chinese manufacturing had come to underpin the business models of many of Americas largest technology companies. Early on, Apple, for instance, made many of its most sophisticated electronics domestically. Then in 1992, it closed a state-of-the-art plant for motherboard and computer assembly in Fremont, Calif., and sent much of that work overseas.

Over the decades, the security of the supply chain became an article of faith despite repeated warnings by Western officials. A belief formed that China was unlikely to jeopardize its position as workshop to the world by letting its spies meddle in its factories. That left the decision about where to build commercial systems resting largely on where capacity was greatest and cheapest. “You end up with a classic SATAN’S BARGAIN,” one former U.S. official says. You can have less supply than you want and guarantee it’s secure, or you can have the supply you need, but there will be risk. Every organization has accepted the second proposition.

In the three years since the briefing in McLean, no commercially viable way to detect attacks like the one on Supermicro’s motherboards has emerged - or has looked likely to emerge. Few companies have the resources of Apple and Amazon, and it took some luck even for them to spot the problem. “This stuff is at the cutting edge of the cutting edge, and there is no easy technological solution,” one of the people present in McLean says. “You have to invest in things that the world wants. You cannot invest in things that the world is not ready to accept yet.”

Bloomberg LP has been a Supermicro customer. According to a Bloomberg LP spokesperson, the company has found no evidence to suggest that it has been affected by the hardware issues raised in the article.

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Posted by Elvis on 10/04/18 •
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Thursday, September 27, 2018

Bad Moon Rising Part 73 - Trade Wars

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While the United States is DYING FROM WITHIN:

Made in China 2025 is a blueprint for transforming the country from a labor-intensive economy that makes toys and clothes into one that engineers advanced products like robots and electric cars. The Trump administration views it as an attempt to steal U.S. technology and control cutting-edge industries.

President Trump started a trade war with China last month.

The only people that are GOING TO GET HURT are you and me.  Now that they don’t have to compete, the American capitalists competing with China will just raise prices

[China] hit back against the US unilateral moves with tit-for-tat tariffs on a long list of US products; on the other hand, China improved its defensive posture by reinforcing its manufacturing sector, which is the backbone of the economy.

US protectionist measures won’t hurt China, but will serve as an external catalyst for China’s industrial upgrading that will make the country a manufacturing superpower.

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Trump’s Tariffs on Chinese Imports Are Actually a Tax on the US Middle Class

By Dan Baker
Truthout
September 24, 2018

In his escalating trade war with China, Donald Trump is acting increasingly like Captain Queeg in the CAINE MUTINY. He has imposed a 10 percent tariff on $200 billion in US imports from China, a rate he proposes to increase to 25 percent at the start of the next year. He also is threatening tariffs on the rest of our imports from China, an additional $300 billion in goods and services.

The straight arithmetic tells us that 10 percent of $200 billion is $20 billion on an annual basis. If this rises to 25 percent next year, the tariffs would be $50 billion. If we add in 10 percent tariffs on another $300 billion, that comes to $30 billion, bringing the total to $80 billion.

While Trump talks as though he thinks his tariffs are taxing China, they aren’t. Most immediately, they are a tax on US households. The full $80 billion would come to a bit less than $600 per household.

It is true that the tariffs will not be passed on dollar for dollar. Some companies will decide it’s better to see their profit market squeezed than pass on the full price increase. This means that Apple and Nike may not raise the price for the iPhone and running shoes by the full amount of the tariff.

In that case, a portion of the tax will be borne by US companies manufacturing items in China. This is fine, since corporate profits are near record highs as a share of GDP. But, this is still not taxing China.

There will be some spillovers where either Chinese companies importing items to the US end up with less money or Chinese suppliers selling to US companies are forced to accept less money, but there is little doubt that the bulk of the tariff will be borne by the US. Trump is effectively proposing one of the largest tax increases on the middle class in memory.

The higher taxes paid by households in the United States could still be a reasonable policy if Trump were pursuing an important and winnable goal. In fact, during his campaign he repeatedly attacked China’s currency policy and insisted he would make changing it a top priority from the first day he was in office.

China’s currency policy is an important issue. If the dollar were 20 percent lower against the Chinese currency, it would go far toward reducing our trade deficit. As a first approximation, it would make Chinese goods and services 20 percent more expensive for people in the United States, and US goods and services 20 percent cheaper for people living in China.

This sort of change in currency values is also likely a winnable goal. China had been raising the value of its currency relative to the dollar over the last decade. This is one reason its trade surplus has fallen so sharply from almost 10 percent of GDP in 2007 to just over 1 percent of GDP today.

Presumably, Trump could have gotten China to agree to a schedule of further increases in the value of the Chinese yuan. China would certainly not agree to a big jump in the value of its currency overnight, which would be disruptive to its economy, but a substantial rise over a period of two to three years would be very manageable for China.

But currency seems to have disappeared from Trump’s agenda now that he is actually in a position to do something. Instead, we get a set of poorly specified and frequently shifting complaints against China.

Trade is not about one country winning and another country losing. Interests within some countries win, while others lose. When millions of manufacturing workers in the Midwest were losing their jobs in the last decade, US corporations that were importing items made in China - like General Motors, Apple, and Walmart were winning. This simple and obvious point seems completely lost on Donald Trump, who seems to think that the balance of imports and exports is a scorecard.

This Trumpian confusion must be kept front and center in understanding Trumps trade wars. While lowering the value of the dollar and reducing the trade deficit in manufactured goods would benefit most US workers, the items on Trump’s agenda largely go the other way. He continually rants about China stealing our intellectual property.

If China pays Microsoft, Pfizer and Boeing more money for their intellectual property claims, it will lead to a larger trade deficit on manufactured goods. That story is good for people who own lots of stock in these companies, but bad news for most everyone else.

So in Donald Trump’s trade war with China, most of us can look forward to paying higher taxes. If he somehow manages to win (and not just claim victory over nothing), it will mean more money for shareholders and fewer US jobs in manufacturing. This is not a good story for the country’s workers.

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Sunday, September 09, 2018

Bad Moon Rising Part 72 - Made In China 2025

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Beijing must prepare counterattack for Washington’s effort to restrain high-tech development

By Hu Weijia
Global Times
September 6, 2018

Washington’s trade dispute with Beijing doesn’t seem to have helped the US stave off its chronic illness of running a trade deficit - at least not yet. The US trade deficit rose to a five-month high in July as exports sank 1 percent from June to $211.08 billion.

As for China, its July exports rose 12.2 percent year-on-year despite fresh US tariffs. China’s economy seems to show more resilience than that of the US amid escalating trade friction. Why? China’s industrial competitiveness may be one reason. In the short term, US consumers can hardly find alternative products to those made in China, so the impact of US tariffs was less than expected.

In the first round of Sino-US trade friction, China’s strategy has been proved to be effective. On the one hand, China hit back against the US’ unilateral moves with tit-for-tat tariffs on a long list of US products; on the other hand, China improved its defensive posture by reinforcing its manufacturing sector, which is the backbone of the economy.

The government is working to make China’s business environment more appealing to manufacturers and looking at fiscal policies that support upgrading its manufacturing sector. China’s huge trade surplus is primarily based on mechanical and electrical products. As long as its manufacturing sector remains competitive, China’s exports won’t tumble. The country is able to handle the pressure of trade tensions if it sticks to its established strategies.

It’s possible that the trade dispute will become a long-lasting conflict. In the second round of trade tensions, China is likely to focus more on manufacturing transformation.

China’s economy is in a critical period in terms of restructuring. Amid escalating trade friction, China has no choice but to pursue a path of independent innovation and overcome the challenges it faces in manufacturing transformation. US protectionist measures won’t hurt China, but will serve as an external catalyst for China’s industrial upgrading that will make the country a manufacturing superpower.

In August, South China’s Guangdong Province released a plan aiming to realize 150 billion yuan ($21.8 billion) worth of investments annually in strategic and emerging industries during the 2018-20 period. China has to be prepared to counterattack US efforts to restrain the rise of China’s high-technology industries.

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How “Made in China 2025” became the real threat in a trade war

By Jessica Meyers
LA Times
April 24, 2018

China unveiled its plan to dominate the world’s most crucial technologies with little international fanfare, another vague, guiding principle in the labyrinth of Communist Party bureaucracy.

Three years later, it’s at the core of a trade dispute with Washington that threatens to upend the global economy.

Made in China 2025 is a blueprint for transforming the country from a labor-intensive economy that makes toys and clothes into one that engineers advanced products like robots and electric cars. The Trump administration views it as an attempt to steal U.S. technology and control cutting-edge industries.

Officials aimed to temper the initiative this month when they announced potential tariffs on $50 billion in goods. But Chinese leaders consider the plan key to the country’s development and refuse to alter its course.

“China is trying to achieve a clear goal and America wants to stop it,” said Andrew Polk, co-founder of Trivium/China, a Beijing research firm. “And that’s where the competition is.”

Here’s what China 2025 is all about and what it means for the trade war:

What’s the objective?

The plan funnels billions into 10 industries, everything from biopharmaceuticals to aerospace and telecom devices. It calls for 70% of related materials and parts to be made domestically within a decade. A separate documentdetails China’s strategy to lead in artificial intelligence by 2030.

Officials modeled Made in China after a German initiative called Industrie 4.0, which envisions greater automation in manufacturing and “intelligent factories” that operate with wireless sensors. They didn’t have much choice. The world’s biggest population is aging and rising wages are sending low-tech factories to other countries.

“The labor supply is decreasing,” said Ashley Qian Wan, China economist for Bloomberg Economics in Beijing. “And that’s going to be a big problem for China.”

Why does China care about this so much?

When President Kennedy vowed in 1961 to send a man to the moon, more than 30 million people in China had just starved to death. People’s Republic founder Mao Tse-tung closed universities for a decade while researchers invented the Internet in Silicon Valley. China sees itself as simply trying to catch up.

The country developed its first bullet train last year, a 248 mph vehicle named Fuxing, or rejuvenation. Engineers also built the country’s first homegrown jetliner, an initial step toward filling Beijing’s crowded airport with planes from China rather than America’s Boeing or Europe’s Airbus.

Officials portray the initiative as transparent and open to foreign companies. They dispel notions that it will monopolize domestic markets. America’s dismissal of the plan reinforces a party narrative that the U.S. seeks to undermine China’s resurgence.

“We have good reasons to question the legality and legitimacy of many actions taken by the U.S. on the grounds of national security, like its plan to impose high tariffs on many industries of Made in China 2025,” Chinese Foreign Ministry spokeswoman Hua Chunying told reporters this month. “Clearly, they are targeting something else.”

Why is the U.S. concerned about it?

The Trump administration frets about the way China aims to achieve its 2025 ambitions. American businesses have long complained about the sacrifices they make to operate in the world’s largest market, including requirements to partner with domestic companies and hand over trade secrets.

Officials fear these techniques will make it impossible for U.S. companies to compete in the world’s most critical fields. They also worry massive Chinese government subsidies will lead to a global glut of products that push down prices and hurt U.S. businesses.

“There are things China listed and said, ‘We’re going to take technology, spend several hundred billion dollars, and dominate the world,’” U.S. Trade Representative Robert Lighthizer told senators at a March hearing. “And these are things that if China dominates the world, it’s bad for America.”

A lengthy U.S. report on China’s intellectual property theft which led to the most recent potential tariffs 0 mentioned the plan more than 100 times. Officials are exploring multiple ways to restrict Chinese investment in key industries. The administration recently banned ZTE, China’s second-largest maker of telecom equipment, from buying American technology.

“Consensus is growing in Washington that the U.S. is in a race with China for technical leadership,” Arthur Kroeber, managing director of Beijing research firm Gavekal Dragonomics, said he recently told clients. And some think “economic cold war is the answer.”

Is the Trump administration right?

President Xi Jinping recently told a room full of global investors that China would further open its economy. Officials last week said they would phase out rules that require car manufacturers like General Motors to find a local partner before opening factories in China. They plan to end foreign ownership requirements on electric vehicle makers this year.

This wouldn’t mark the first time authorities vowed to shed their protectionist shield. The European Union Chamber of Commerce in China complained last year that foreign businesses were suffering from “promise fatigue.”

The problem is China’s high-tech ambitions include “plans to use instruments such as subsidized credit and market access restrictions,” said David Dollar, a senior fellow at the Brookings Institution and former U.S. Treasury official in China. “It makes sense for the U.S. to oppose this practice.”

But Chinese officials see an irony in efforts that try to maintain America’s chokehold on innovation. Hua, the Foreign Ministry spokeswoman, likened the U.S. to a “bully only it can have high tech and others cannot.”

Neither side looks willing to bend. Recent talks to de-escalate the trade dispute reportedly collapsed over the 2025 plan.

“China views the overall system as inherently unfair because it was created by the current dominant power,” Trivium’s Polk said. “America should stop complaining and start designing its own industrial policy to counter China.”

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Posted by Elvis on 09/09/18 •
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Monday, August 13, 2018

Bad Moon Rising Part 71 - Chinese Super Weapons

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Chinese superweapons that the world needs to know about

By David Cohen
Anonymous
August 12, 2018

After the fall of the Soviet Union, the Chinese military faced several major issues. The primary issue during this time was where they were going to get their military hardware and technology from.

Up until this time, the Soviet Union was the primary source for Chinese weapons and hardware. Although there were some locally made Chinese weapons, most of its AK-47s as well as their fighter aircraft were made and produced in the Soviet Union.

The Iron Curtain fell and China realized that it was far behind many industrialized nations in many respects. As the country with the largest population on the planet, the Chinese needed to come up with ways in which to modernize both their economy as well as their military, and fast.

So they started their own military programs to create helicopters, tanks, missiles, ships, and weapons. They did this both by using their own ingenuity as well as hacking into the mainframes of militaries around the world in order to steal information and build their own version of whatever they needed.

Slowly but surely, China began to raise its military profile. Now along with an enormous army full of soldiers (the number of Chinese soldiers exceeds the number of inhabitants of many countries), the Chinese military has also modernized to a huge degree.

Now, as a rising regional power with potential global ambitions, the Chinese are threatening United States supremacy in south east Asia. They are flexing their new found muscle in trying to project their power over islands in Japan, the Philippines, and of course their main rival Taiwan.

This power projection is being made possible by a renewal of the Chinese navy as well as vast locally made improvements to the Chinese Air Force, coupled with Chinese nuclear second strike capability.

So what do these Chinese future weapons look like?

Type 094 submarine

This submarine was first spotted in 2006 in satellite images of the Xiaopingdao Submarine Base, and almost nothing is known about it. What is known however was leaked from classified documents. This type exceeds the capabilities of the Type 092 submarine, and gives China the possibility for a sea based nuclear strike. The submarines can hold up to four intercontinental cruise missiles which can all be tipped with nuclear warheads (3 or 4 of them, as reported). This is part of China’s nuclear triad, which consists of land based, air based, and now sea based nuclear weapons. The existence of this submarine now means that China has second strike capabilities.

Type 054A Frigate

The Type 054A frigate entered service back in 2007, and is a development of the existing Type 054 frigate, but with better sensors and improved weapons. Currently, 26 of these are in service. This Chinese frigate class has a whole wealth of capabilities to defend the Chinese homeland from seaborne threats. It has anti-ship and anti-submarine missiles, and also has a Chinese adaptation of the Russian Buk surface to air missile. These frigates have already seen action in patrolling the Gulf of Aden for Somali pirates. They were also deployed to Libya to help evacuated Chinese nationals stranded there, as well as helped to ferry chemical weapons out of Syria.

Harbin Z-19

This is essentially a Chinese copy of a Eurocopter Dauphin, and it is China’s primary combat helicopter. With a 430 mile range as well as a high rate of climb, these deadly helicopters are able to carry a whole wealth of different armaments. They can carry everything from anti-ship missiles, anti-personnel missiles, and even anti-tank missiles. The helicopter also has whisper rotors and an exhaust system which confuses heat seeking missiles.

Jiaolong

The Chinese are now one of five countries who have the technology to be able to develop a deep sea submersible capable of going to the deepest depths of the ocean floor. This submersible is able to do tons of planet saving research, but can also be used to sabotage undersea cables. Or the Chinese could decide that they want to awaken that mysterious sleeping giant, Cthulhu. Hopefully they just use it for research purposes.

Xian H-6

This is a Chinese copy of a Soviet Tupolev TU-16 bomber, and despite its long service history, it is still a plane which poses a threat to neighboring powers and is a key component in Chinese power projection. It is able to carry all sorts of missiles and bombs, including nuclear weapons. The plane has a range of 3,700 miles, putting many NATO bases in range, as well as many bases of ASEAN countries.

J-20

The Chengdu J-20 is Chinas first homemade, fifth generation multi-role fighter jet. It is believed that plans for the F-35 were stolen by China in a massive cybersecurity hack and they were able to obtain the technology to build their own version. This can be seen in the physical similarities between the two aircraft. The plane aims to create Chinese air superiority in the region as it has a maximum speed of 1,300 miles per hour.

J-11

This Chinese fighter jet is the workhorse of the Chinese Air Force with over 250 in active duty service. Designed based off of the Soviet Sukhoi Su-27, this plane can go over twice the speed of sound and fly at over 65,000 feet. Flying so fast and so high, this Chinese fighter plane was designed with the sole purpose of being able to take over the skies in any military confrontation the Chinese military might have.

DF-5 ICBM

The DF-5 is the intercontinental ballistic missile (ICBM for short) with the longest range in the Chinese arsenal. This missile is able to carry out a nuclear strike anywhere on the planet (except for South America according to some estimates). Despite the fact that there are only an estimated 20 of these missiles in the Chinese arsenal, they still can take out 20 major enemy cities, with New York City, Los Angeles, London, and Moscow all well within range.

PLZ-45 Howitzer

This self propelled artillery gun is able to fire a 155 mm projectile over 18 miles at enemy defenses and troops. It has an extremely advanced fire control system which uses laser range finders, and has the ability to use smart artillery rounds which are able to change flight path mid-air. The PLZ-45 has already proven itself in battle, having been used by the Saudi Arabians and the Kuwaitis in their war in Yemen.

Xian H-20

This is a stealth bomber which is currently being designed, built and tested by the Chinese Air Force. An almost direct copy of the American B-2 Spirit stealth bomber, this Chinese bomber is being developed in order to be able to go on long range strategic bombing missions and fly well past Japan. This would extend ChinaҒs strategic reach, and make the entire game of global policy that much more difficult.

Xian Y-20

This cargo aircraft is used by the Chinese military in order to ferry goods and soldiers to anywhere in China at a moments notice. Perhaps most interestingly, many of the planeҒs parts were created using a 3D printer, thereby drastically lowering the cost of production. The plane can carry up to 66 tons, and when filled with troops, has a range of 6,200 miles, enabling this plane to reach anywhere in Asia.

Type 052D destroyer

This Chinese destroyer can be seen patrolling waters all around China as well as infringing on the territorial waters of several other countries. The destroyer has the ability to launch a whole wealth of weapons, ranging from surface to air missiles, cruise missiles, anti-ship missiles, and even anti-submarine missiles. China currently has about eight of these ships in active duty with a further three more undergoing sea trials.

After the fall of the Soviet Union, the Chinese military faced several major issues. The primary issue during this time was where they were going to get their military hardware and technology from.

Up until this time, the Soviet Union was the primary source for Chinese weapons and hardware. Although there were some locally made Chinese weapons, most of its AK-47*s as well as their fighter aircraft were made and produced in the Soviet Union.

The Iron Curtain fell and China realized that it was far behind many industrialized nations in many respects. As the country with the largest population on the planet, the Chinese needed to come up with ways in which to modernize both their economy as well as their military, and fast.

So they started their own military programs to create helicopters, tanks, missiles, ships, and weapons. They did this both by using their own ingenuity as well as hacking into the mainframes of militaries around the world in order to steal information and build their own version of whatever they needed.

Slowly but surely, China began to raise its military profile. Now along with an enormous army full of soldiers (the number of Chinese soldiers exceeds the number of inhabitants of many countries), the Chinese military has also modernized to a huge degree.

Now, as a rising regional power with potential global ambitions, the Chinese are threatening United States supremacy in south east Asia. They are flexing their new found muscle in trying to project their power over islands in Japan, the Philippines, and of course their main rival Taiwan.

This power projection is being made possible by a renewal of the Chinese navy as well as vast locally made improvements to the Chinese Air Force, coupled with Chinese nuclear second strike capability.

J-16

This joint strike fighter plane was introduced into the Chinese Air Force in 2013 and relatively little is known about it. It is apparent that it is meant to be similar to the F-15 and that it can carry anti-ship missiles, air to ground missiles, and even air to air missiles. The fighter jet is able to fly at speeds of up to twice the speed of sound, and can go up to 58,000 feet in the air.

HQ-17

This is a surface to air missile which was almost completely copied from the types of missiles in use by the Soviet Union at the end of the cold war. However, this Chinese variant has an electronically scanned radar array, as well as the ability to launch in any and all terrains. The surface to air missile is even able to link up to other Chinese systems, creating an integrated air defense system.

JL-2

The JL-2 is a submarine launched intercontinental cruise missile. It can be launched stealthily from anywhere in the world at any time with little to no advance warning. The missile has such a large range that, should it be shot off from somewhere close to the Chinese mainland, it would be able to hit any target in California, Europe, or Australia. These missiles are capable of carrying nuclear warheads.

SW-6 UAV

This drone may look like a drone now, but it is actually shot out of a moving aircraft. It is more or less a combination drone-missile. It is designed to be fired from the underwing of a rotor or fixed wing aircraft, unfold in mid-air, and then fly around until the operator finds a suitable target. The UAV can be used for a variety of purposes, from radar and electronics jamming to being able to deliver a 10 pound warhead into a specific area.

CH-500

This dual rotor unmanned aerial vehicle is equipped with two laser guided air to ground missiles. Designed to be a cheap weapon, this drone can be quickly deployed by Chinese ground forces and be used to take out enemies behind front lines, in hills and valleys, or even in urban environments, being able to shoot through windows if the need arises. They can also take out enemy tanks with ease.

CH-805

This flying wing designed drone is officially only going to be used to test Chinese radar and air defenses along with radar systems inside Chinas new indigenous fifth generation fighter planes. The drone can reach near supersonic speeds, and provides a difficult target to track. However, due to this low radar signature, there is a worry that this drone my in the end be used operationally, posing a challenge to enemy forces.

Harbin Z-19

The Harbin Z-19 is ChinaҒs new and improved version of its Z-9, the countrys primary attack helicopter. The helicopter has whisper rotors, making the helicopter quite quiet, along with a new exhaust system which lowers its heat signature, and thereby defending it against threats from heat seeking missiles. The fire control system is also brand new and a lot more effective than the previous iteration.

Unkown missile launching system

This new missile launching system was only recently discovered and photographed. It looks like a Soviet or Russian style anti-aircraft missile system Җ perhaps a component of the S-300 anti-aircraft system, which is the system currently deployed in order to defend the skies above Syria. Should this be the case, it is likely that the Chinese would reverse engineer this technology in order to make their own version. Or perhaps they already have, and this is the result.

Silent Hunter anti-missile laser

This system is designed to defend ships and perhaps tanks against incoming missile threats. The way that this system is believed to work is by shooting an extremely high powered, super heated laser at an incoming missile, thereby either cutting the missile up or even blowing up the projectile mid-air. However, due to the fact that we have not seen it in use yet, we do not know for certain what its capabilities are.

VT-4 MBT

This is the newest, third generation battle tank in the Chinese arsenal. It is impressive due to it being constructed out of a special, anti-explosive composite material, as well as the fact that it is outfitted with a whole range of defenses, along with a high tech cannon and laser targeting system. It has so far been sold to the Thai military. However, perhaps most importantly, it has air conditioning.

Drone disabling gun

Drones are everywhere these days. You can buy them at any corner store it seems, and they are always flying around parks, the beach, events, and everything else. It is quite obnoxious to go out into nature only to hear the buzzing of a drone. Well, the Chinese now have a gun which shoots them down ֖ not with projectiles, but by shooting radio waves at the drone in what amounts to a Ddos attack. No word yet on whether or not you can order it on Alibaba.

CH-805

This flying wing designed drone is officially only going to be used to test Chinese radar and air defenses along with radar systems inside Chinas new indigenous fifth generation fighter planes. The drone can reach near supersonic speeds, and provides a difficult target to track. However, due to this low radar signature, there is a worry that this drone my in the end be used operationally, posing a challenge to enemy forces.

Drone swarms

Thats right, China is currently building swarm drones. And they operate nearly independently. Using techniques learned by watching schools of fish and flocks of birds, the Chinese have figured out how to get over 100 drones to work together in order to fly in conjunction with minimal input from an operator. Set to be used primarily for reconnaissance or intelligence gathering, all an operator needs to say is search hereӔ and the swarm will do the rest.

ZH-05

This Chinese gun is one of the newest combat infantry weapons in the Chinese arsenal. Able to fire at 600 rounds per minute and with a range of 400 meters, this is truly a sharp looking weapon. However, what makes it unique is that the scope has a camera on it, enabling it to hook up to a lens on a soldiers helmet. This lets the soldier peer around corners and fire any enemy coming at them.

Chinese robot savior

This robot looks like a cross between a human and a spider. Its main purpose is to be able to conduct search and rescue missions and find missing civilians and soldiers underneath tons of rubble. The Chinese have unfortunately been forced to use this on multiple occasions due to the various earthquakes which the country has seen in recent years, particularly in Yunnan.

Type 22 Missile Boat

These small quick, double hulled missile boats really worry military strategists. The boats, which are cheap and easy to produce, can swarm a US carrier strike force and cause a whole lot of damage. This is because these boats are equipped with eight anti-ship missiles. Should just 10 of the reported 83 of these missile boats fire a salvo of rockets, that translates into 80 highly accurate and fast anti-ship missiles. The missiles only need to be lucky once.

Ground Control Station

This is a ground control station which is going to be put into spotter planes which will be flying above the main battle. The crazy thing about this however, is that it is a hologram. Thats right, just like in every sci-fi movie that has ever been made, these holodecks will enable a commander to be able to see an entire battlefield in full 360 degree coverage, enabling them to make better decisions in real time.

SOAR Dragon drone

The SOAR Dragon is another one of ChinaҒs newest drones coming off the line. It is specifically developed to do high altitude reconnaissance and surveillance. The drone has a service ceiling of 59,000 feet, and is able to fly for 10 hours without refueling. The range of the plane is approximately 4,300 miles, putting much of east Asia within this airplanes reach.

YJ-12

The YJ-12 is an anti-ship cruise missile which can fly at supersonic speeds towards its target. The missile flies over the top of the sea, keeping a low radar profile. The profile is so small that it would not be picked up by an enemy shipҒs radar until about 30 seconds to impact. The missile is also really fast, flying up to three times the speed of sound. There is very little in an enemys naval arsenal that can take this on.

Type 87 grenade launcher

This is exactly what it sounds like no ifs, ands, or buts about it. It is built like a normal, belt fed submachine gun, but with a twist; it shoots grenades. This incredible weapon of destruction is able to shoot out 120 grenades a minute (two grenades a second). While China has not seen these used in action as of this writing, the Syrian military has been using them in its civil war, as has the Sudanese and Pakistani militaries.

AMR-2

This is a huge, 50 caliber sniper rifle. It is actually deemed to be an anti-materiel gun as opposed to being an anti-personnel weapon. This means that the primary targets of this gun are vehicles, and not people. This is because at over a mile a way, a bullet fired from this rifle can split a man in half and keep going for another quarter mile. These are powerful guns, and can help turn the tide of a war.

FHJ-84

This is a twin barreled incendiary rocket launcher modeled after several of the Russian varieties. It can be either shoulder fired or fired from a tripod. The reason for the double barrel is simple. Many tanks have some sort of anti-missile protection which can shoot a projectile out of the air. But this fires a lead projectile, causing the anti-missile protection to go off, and enabling the primary missile to hit the target.

QCW-05

This is a lightweight, short, bullpup machine gun produced for and used by the Chinese military, specifically its special forces and police. The gun is unique not only in its light weight, but also in its special, 50 round banana clip. While most clips only are able to hold approximately 30 bullets, this clip was designed to effectively carry 50. It takes a 5.8 mm round, and is effective at around 200 meters.

QBZ-95

Another bullpup designed assault weapon, the QBZ-95 comes in three variants; a carbine, light support weapon, and standard rifle. Firing a .42 mm or .45 mm round, this gun can accurately hit a target at over 400 yards. There are currently over 97 variants and knock offs of this weapon being used in conflicts in every corner of the globe, with the first of these weapons leaving Chinese borders when they were seen in Hong Kong under British occupation.

Shenyang J-31

This plane is interesting not only because it is an indigenous Chinese fifth generation stealth fighter, but also because this plane was not built by the military. It was instead built by a state-owned company. While it will probably not see use until 2018, there are already several prototypes built, and it is expected to be a competitor for the F-35. We do not know too much about the aircraft, but it will definitely threaten US air superiority over southeast Asia.

KJ-2000

This is China’s very own airborne warning and control plane (AWACS). It is designed not only to find enemy forces and ships at a long range, but is used as a mobile, airborne command center as well, enabling troops to receive the most updated, real time information. Additionally, the Chinese KJ-2000 is able to track up to 100 targets simultaneously in the sea, on land, and in the air.

Qbu-88 sniper rifle

This bullpup designed sniper rifle shoots .42mm rounds accurately up to approximately one kilometer, making it one of the primary sniper rifles in the Chinese People’s Liberation Army as well as the Chinese Police Force for hostage situations. The bullpup design enables higher rates of accuracy as well as less kickback than a normal sniper rifle. Weighing in at only 9lbs, this sniper rifle is perfect for special forces operators.

Type 67 Machine gun

Despite it being so old, this weapon sure packs a powerful punch. Being able to be belt fed, this machine gun has the ability to fire over 650 rounds per minute. The Type 67, which has gone through at least two upgrades, was a menace to American troops during the Vietnam War. More recently, it was used during the Lebanese Civil War, as well as currently in the Syrian Civil War as well as the current Yemeni Civil War to great effect.

Type 56 assault rifle

A quick question suppose you are a country who wants to buy a whole slew of weapons, but simply does not have the money to buy high quality AK-47s en masse? The answer ֖ go to China and pick up tons of Type 56 rifles. This is a knock off of the AK-47 and is about half the price. 37 countries which use this as their primary weapon, and its a favorite for terrorist organizations from the Taliban to Hamas to ISIS.

Type 81 MRLS

The Chinese invented the multiple rocket launcher system way back in the 11th century, but they have vastly improved upon it since then. With the PeopleҒs Liberation Armys Type 81, the military is able to shoot a massive barrage of 40 122mm missiles at any target, which is basically enough to flatten a medium sized town from about 30 miles away. This is far enough away that most artillery would not even be able to accurately hit it.

Dong-Feng 21

Known as the DF-21, this is a medium range cruise missile. These giants can be modified to be able to be shot at either ground based or even sea based targets. With a range of 1,700 kilometers, it could easily carry out a strike on several places in the south Pacific. According to the various international military sources, it would only take one of these missiles to sink an enemy aircraft carrier. The sources also stated that there is currently no defense against it.

Type 99

The Type 99 tank is the newest armored workhorse of the PeopleҒs Liberation Army. It can travel of speeds of up to 50 miles per hour, giving it great maneuverability. Capable of carrying up to 42 tank rounds, this vehicle also has an automatic carousel loader for quick firing which can be done either automatically or manually. The tank can also be outfitted to fire both high explosive anti-tank rounds as well as ATGMs for lighter armored vehicles.

ZBD05

The ZBD05 is the newest, most upgraded amphibious assault ship in the Chinese arsenal. Capable of carry eight soldiers, it is capable of hitting speeds of up to 30 miles per hour in the water, a speed which most personal speedboats have trouble getting up to. For defense, it is equipped with a 30mm cannon as well as the ability to launch short range HJ-8 anti-tank missiles.

Type 82 automatic p*stol

Based on the Polish PM-63 RAK, this p*stol has both semi-automatic as well as automatic mode. Firing an .18mm round, this weapon is small and compact enough to be used super-effectively at close range. The primary operators of this weapon are Chinese special forces. China captured several of these gun*s in the Sino-Vietnamese wars, reversed engineered them, and then started making their own

QJZ-89

This is technically an anti-aircraft gun which shoots enormous .50 caliber bullets into the air in order to bring down enemy aircraft which have intruded into Chinese airspace. This weapon is not used as much in this manner anymore, and is used by various groups in Syria, Yemen, and South Sudan as a way to simply mow down adversaries in those countries֒ civil wars.

Pterodactyl UAV (CH-5)

This drone is a Chinese copy of the US Air Force Reaper drone. Unveiled at an airshow in the Chinese city of Zhuhai in 2016, the Chinese Air Force claims that the plane can fly for two days without refuelling, and has a range of over 15,000 miles enough to fly from Beijing to Chicago and back. The drone also allegedly able to carry a range of smart bombs as well as jam all sorts of radar defense systems.

Norinco Battle Robot

This is a Chinese combat robot, able to take on any terrain both natural and urban. It is tracked, enabling the robot to climb over both rocks as well as stairs with ease. Its primary armament is a 12 gauge shotgun, but it can be outfitted with a machine gun, grenade launcher, or even robotic arms which can be used to dismantle a bomb. Used as a forward weapon, it is able to go into buildings and look for booby traps instead of people.

Aircraft Carrier

The true test of a country֒s power projection is whether or not it can field its forces from far flung forward operating bases effectively and consistently. One of the best ways to do this is with an aircraft carrier. And now, China has one. The ship itself was bought from Ukraine under the guise of being turned into a theme park (China bought two carriers for this purpose). However, once it got to China, the carrier was retrofitted, and is now operational.

SOURCE

Posted by Elvis on 08/13/18 •
Section Bad Moon Rising
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